Professional Advice

Accountants

The accountant is the best person to advise on the legal structure of the business, and will advise on the taxation consequences of each structure and help you to decide which is the most appropriate for your circumstances. The accountant will endeavour to organise your affairs so as to minimise your tax liabilities.

The accountant should be able to calculate break-even figures and to advise on your charging structure and whether it is realistic. The accountant will often have information on similar businesses that should help with your business planning.

The accountant will help in preparing a business plan and will make comments on your plans. They should have a commercial awareness that can enable them to make constructive comments, and hopefully to suggest ways of increasing your profit.

If finance is required, they will help you obtain this and will be able to help with any financial queries that a bank manager may have. The accountant should be able to advise you of any grants and government assistance available.

Once the business is about to commence, the accountant can arrange for the necessary VAT, PAYE and other taxation matters to be dealt with. They can then help to set up a bookkeeping system that is appropriate to the business and can show you how to keep the necessary records.

As stated earlier, if the business is to be a limited company it may require an audit. If this is the case, a registered auditor - normally a chartered or certified accountant - will have to be appointed. You should be aware that anyone can set up in business as an accountant, therefore you should find out what qualifications they have. You will normally find that the cheapest accountant is rarely the best. You should choose an accountant who has experience in helping people set up in business.

Accountants charge by the hour, therefore it is important not to waste their time as it will cost you money. An accountant is going to be very important during the early stages of your business. An accountant should provide you with a good service - if you are not getting that service you will need to consider changing your accountant. In the long term, your accountant should save you a lot of money.

The best way of finding an accountant who will give you the service that you require is to ask friends in business if they can make a recommendation. You should see more than one accountant - an initial meeting should be free and it should give you a good indication of whether you will obtain a good service and good advice. You should also receive an indication of the likely costs.

Solicitors

A solicitor will be required for the following:

the preparation of purchase and tenancy agreements;

terms of trade;

partnership agreements;

preparation of legal documents;

contracts of employment.

Solicitors charge by the hour or on a set fee basis. Again the best way of finding a solicitor is by a personal recommendation from a friend in business. Choose one that is experienced in business law.

Banks

Although the bank is not the only source of finance, you will need to open a bank account when you commence in business. You are likely to want to borrow money from the bank at some time. The best bank to approach first is normally your own bank as you will be known there. If you can show that you can manage your personal affairs satisfactorily, then it will give the bank a greater degree of confidence in your abilities to run your own business. If you do not feel that your own bank has given you good advice then ask friends and professional advisers to recommend other banks before making a decision.

Banks can provide the following types of accounts and facilities:

deposit accounts;

current accounts;

overdrafts;

loans;

hire purchase loans;

factoring of debts.

An overdraft is a current account that is payable on demand. It is normally used for financing current assets (stocks and debtors). A loan is repayable over a fixed term and is usually used to purchase fixed assets such as buildings, machinery, fixtures and fittings and motor vehicles. Interest rates on loans can be determined at the start of the loan, or be varied according to the current rates of interest. An arrangement fee is normally payable on the setting up of borrowing facilities.

Banks are also involved in the leasing of assets. This form of finance required a lower deposit and so can help your cash flow in early years. Factoring is another form of finance. Basically, it is lending against monies owed from customers. It is most often used by expanding companies who have inadequate overdraft facilities.

Banks will normally require a form of security if they are to lend you money. This could be in the form of a second mortgage on your house, a personal guarantee, or the lodging of a bond with the bank.

Most banks offer free banking for the first year if your account stays in credit. You should find out how the bank calculates its charges. You should be aware that cash handling is expensive and may affect the banks' free banking criteria.